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Meritage off Opentable in July

Got the email this morning. Think this is the start of a trend?

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Meritage
410 Saint Peter St, Saint Paul, MN 55102

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  1. Interesting. I can't speak to the economics behind the decision - I know absolutely nothing about making money as a restaurateur. As a diner, though, opentable is directly responsible for a large majority of my reservation bookings. The opentable iPhone app has changed the way I decide where to have dinner.

    I'm guessing that Meritage will be just fine. Elite restaurants probably don't really need opentable. Look at 112 - packed every night. But at the same time, there are plenty of elite restaurants on opentable, and if 112 was on opentable I'd be there WAY more often.

    So as a diner, I hope it's not a trend.

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    Meritage
    410 Saint Peter St, Saint Paul, MN 55102

    12 Replies
    1. re: keithinmpls

      I hope it's not a trend.

      The main downside of Opentable is that the restaurant has to pay for each reservation made on Opentable. I'm not sure of the amount - a dollar, perhaps? However, in exchange for that fee, they get advertising. I use Opentable all the time, to remind myself of what restaurants are out there and to see what's available at any given time. In fact, often when I want to go out and I'm not sure where to go, I'll use Opentable to browse what's available, and decide from that list. I think that's a powerful incentive for any restaurant to be on Opentable.

      I doubt that there are a whole lot of restaurants which are packed from the moment they open the doors till they close them, and anyone else is missing out by not being on Opentable.

      Disclaimer: I have no affiliation with Opentable other than as a user.

      1. re: nsxtasy

        OpenTable is a truly awful deal for the restaurants. Most use it because they think they can't afford not to, but truly, once I read about how Open Table charges restaurants, I stopped using it-- I will use it to find out what's available, then call the resto to make the reservation....

        http://incanto.biz/2010/10/22/is-open...
        http://www.citypages.com/2011-05-04/r...

        1. re: mtullius

          Most restaurants locally fall into a category that costs between $1-$7 per booking. Remember goodfella's? Opentable is the mob. Computer's down? F.U pay me. Lost the reservation? F.U. pay me. You wan't to list that you are closed on sundays because Open table is dissolving your bottom line revenue? F.U pay me. Until there is something different, they will continue to be a necessary evil...

          1. re: mitch cumstein

            Thanks for sharing. I had no idea. I'll definitely start phoning in my reservations from now.

            1. re: DukeFan

              Not me. Opentable makes my life easier as a diner and they deserve to be compensated for that service. And they give you incentive - I have $100+ waiting to be redeemed in credit because I make spontaneous rezzies on my opentable app while en route to any given resto.

              1. re: keithinmpls

                "they deserve to be compensated for that service."

                Sure. But the odd thing about their business model is that it's not YOU, the one whose life is being made easier, who pays for the service. It's the restaurant. For you, it's "free," which in this case means someone else is paying for it.

                Your convenience may lead to you having fewer and fewer good, local options for eating out, since OpenTable's extortionate fees may drive the restos out of business. Then you can have the convenience of choosing between Applebee's, TGI Friday's, and whatever other corporate behemoths survive. Yippee!

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                Applebee's Restaurant
                2201 Coulee Rd, Hudson, WI 54016

                1. re: mtullius

                  If the cost of the Open Table service isn't built into their business model then they aren't going to be around long anyway. Fact is that all things costing need to be charged for. If the Restaurant isn't charging for the Open Table service in some way they are going to be a memory. People in Minnesota need to realize that great food and service cost money. Yes I'm calling some people cheap....

                  1. re: mtullius

                    OpenTable brings more of MY money through the door of restaurants that participate. I have nothing against restaurants that decide not participating will improve their profitability, but I can definitely say that I will be spending far less on dinner and drinks there.

                    1. re: keithinmpls

                      I don't fault anyone strongly for using OpenTable, especially if it can be a win-win situation for them and the restaurant. My opinion is that, more often than not, it's not a win-win, and it's things like that (as well as credit card fees) that chip away at restauranteurs' ability to thrive long-term (if not just survive).

                      What it comes down to for me is that I'm one of the dying breed that actually prefers talking to someone. I like the personal approach of picking up the phone and making the reservation directly. For Meritage, it might even lead to "any hints on seasonal specials coming next week?" and give me a few extra days to ruminate on visions of ramps, asparagus, or whatever in-season items they might mention.

                      I guess I'm pollyanna or old fashioned or whatever, but it never bothers me when I see signs of "conveniences" like OpenTable, Groupon, etc. losing steam and/or dying off. I hate using OpenTable.

                      My utopia is filled with great chefs with smallish restaurants that thrive on personal service and the simplicity of sharing great food with patrons.

                        1. re: MSPD

                          Well said MSPD! I am with you on this one.

              2. re: mtullius

                After reading the City Pages article above, I've taken to checking the general availability on Open Table and then going to the restaurant's website and making my reservation there. The fee is much cheaper for the restaurant that way. (According to CP, the fee for that is $0.25.)

                Of course, one of my problems with OpenTable is that they often don't have true availability listings. I often find I can find tables at times that OpenTable lists as unavailable by calling.

          2. OpenTable is convenient, but I wouldn't pay $2+ for the convenience if given the choice, and since it's built into the cost of doing business, I'm happy to see local restaurants moving away from it...

            ...As long as said restaurants do not eschew OpenTable in favor of the "wait two hours for a table at our restaurant" trend. I would gladly pay $2+ to skip that.

            1. I do all my reservations on my phone. I hope this does not spread to other Restaurants. I won't be waiting for someone to answer and make my reservation. There are to many great restaurants to choose from that are using open table. The best thing about Open Table is seeing when a table is available. If I was charged $3 for a reservation I would still think it was a deal. I wonder what the cost is of a person answering the phone and ignoring people that walk in costs.

              2 Replies
              1. re: ibew292

                The cost is clearly less, or Meritage wouldn't have done away with OpenTable. I wonder if they are still going to have an online reservation system. Incanto's system has updated availability, and every feature OpenTable provides.

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                Meritage
                410 Saint Peter St, Saint Paul, MN 55102

                1. re: kevin47

                  I like Open Table, but in answer to your question - yes, Meritage will still have an online reservation program and a rewards program. http://www.meritage-stpaul.com/reserv...

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                  Meritage
                  410 Saint Peter St, Saint Paul, MN 55102

              2. Thanks for this heads up. I use Opentable and love it for all the reasons everyone already posted and I often use it to check an address, phone number or hours. I had not realized the high cost for each reservation and will have to think about it in the future.

                This does lead me to a huge restaurant website pet peeve: Do not bury your hours and phone numbers on your websites. It should be on the home page, not 10 clicks away....or I will quickly look elsewhere.

                2 Replies
                1. re: rockyd

                  >> This does lead me to a huge restaurant website pet peeve: Do not bury your hours and phone numbers on your websites. It should be on the home page, not 10 clicks away....or I will quickly look elsewhere.

                  Absolutely! One more item of information along with hours and phone number: your street address would be mighty helpful!

                  1. re: nsxtasy

                    I totally agree. I can't understand why I have to dig around on resto sites to find a phone #!

                2. http://shefzilla.com/
                  A restauranteur's view, for what it's worth. I admit I myself am a frequent Open Table user. I find it especially useful when traveling but it is also fun to just browse sometimes.

                  15 Replies
                  1. re: MrSlippery

                    Clicking through that link, a post leads here:

                    http://blogs.citypages.com/food/2011/...

                    Meritage paid OpenTable $15,000 - $18,000 last year, Hell's Kitchen around $32,000. The new system they are using is $200 / mo flat fee.

                    1. re: MrSlippery

                      Shefzilla's post is utterly ridiculous-- the first two paragraphs are so illogical as to make the rest moot. If OpenTable cost restaurants a million dollars per reservation, but charged diners nothing, would it still be a good deal for restaurants? Would it still be open and shut, as he suggests?

                      Of course not. So the only question is: is the value provided to restaurants by OT worth the price. Pretending that the only alternative to OT is some pre-computer world where all reservations are taken by phone is ludicrous. There ARE alternatives, and Meritage is taking advantage of one of them.

                      As a restaurant consumer, I am also entitled to consider whether the cost of OT (to restaurants, since they've cleverly hidden the cost from the consumer) is worthwhile. In my case, I use OT to find open reso times, then call the restaurant to make the reso. Simple enough, and saves my favorite restaurants big $$.

                      But a system that's fairer to restaurants, and equally convenient for customers, would be much preferable.

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                      Meritage
                      410 Saint Peter St, Saint Paul, MN 55102

                      1. re: mtullius

                        Actually Zilla's post makes perfect sense. OT has brought to market a product that has changed the game for me as a restaurant consumer. Changed the game.

                        As I've said before, as a diner I can't speak to the effect that OT has on a restaurant's bottom line. Chef Klein felt the expense wasn't worth it. Chef Woodman feels it is. There is no right or wrong - these gentlemen and other restaurateurs, I'm sure, make similar decisions (ie. happy hour deals and other promotions) all the time. Do you feel bad for going out for happy hour? Your resto's profit margins aren't as high until after 6, you know. Why would you deprive yourself of a positive restaurant experience out of some sense that you need to watch out for a business's profit vs loss statement? If Heidi and Zilla didn't think OT was worth the cost they wouldn't use it. Period.

                        And congrats to Meritage for going with a OT competitor. It's a great restaurant, and I hope it keeps thriving. And again, I'm an ignoramus regarding making money by serving food to folks, but it should be mentioned that you get what you pay for.

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                        Meritage
                        410 Saint Peter St, Saint Paul, MN 55102

                        1. re: mtullius

                          The first two paragraphs are rhetorical. It benefits customers. He chooses to use it. What is the problem? On those grounds, its hard to argue.

                          Restos save very little when you call in vs. OpenTable, as I understand the model. They are supposed to take a per-diner fee for every reservation.

                          1. re: kevin47

                            Kevin, I think you're mistaken. OT charges a high per-diner fee for each reservation, so high, in fact, that it pretty much erases the restaurant's profit for that diner. That's how I understand it.

                            I don't have a problem with restos that choose to use OT. Shefzilla's post implies that using OT is a no-brainer, and thus that anyone who chooses not to is dumb. That's what I object to.

                            As to Keith, the difference between taking advantage of happy hour and OT is that OT is a HUGE MULTI-MILLION DOLLAR CORPORATION. Rather a large difference. In my opinion, OT is taking advantage of its near-monopoly to charge unreasonable fees to restaurants. I object to that because I assume it will make some restaurants go out of business, or otherwise harm their business, and I care about the restaurants I patronize.

                            1. re: mtullius

                              We'll have to agree to disagree, I guess. I have no problem with MULTI-MILLION DOLLAR CORPORATIONS. I happen to work for one. I love my iPhone. I use Google. I shop at Target sometimes.

                              Don't assume. There's a saying about that. Nobody is going out of business because they partner with OT. OT charges a fee for using the Internet and wireless technology to bring business to restaurants. That's it. Restaurants are free to use or not use this service. Unless you're a restaurant owner, like say, Stewart Woodman, you can't knowledgeably speak to the economic pros and cons of OT from that perspective.

                              I'm a diner. I love eating out. OT makes my dining life better. So do happy hour deals. Both cut into resto profits. Both bring peeps in the door. No need to apologize for that.

                              1. re: mtullius

                                >> OT charges a high per-diner fee for each reservation, so high, in fact, that it pretty much erases the restaurant's profit for that diner. That's how I understand it.

                                According to the articles, the per-diner fee is one dollar.

                                1. re: nsxtasy

                                  It's $1 if you reserve through the restaurant's web site. It's much higher if you reserve directly through the OpenTable web site.

                                  1. re: Rowdy

                                    >> It's $1 if you reserve through the restaurant's web site. It's much higher if you reserve directly through the OpenTable web site.

                                    Nope. The article linked above said it's 25 cents per person when clicked through from the restaurant's own website, one dollar booked through the Opentable website. Here's the direct quote from the Citypages article: "The system's biggest source of contention is that it also charges the restaurant $1 for each person in the dining party on reservations booked through Open Table's website. If diners book by clicking through the restaurant's website, that fee is reduced to $.25 per person."

                                    1. re: nsxtasy

                                      I should have double checked the article, I suppose. Right principle, wrong amount.

                                  2. re: nsxtasy

                                    Yes. Exactly. A dollar is a very high fee for each diner. How much profit do you think a restaurant clears on each diner? But I believe the article also mentions some ridiculous fee charged for those redeeming points or whatever, which is even more...

                                    1. re: mtullius

                                      >> A dollar is a very high fee for each diner.

                                      I disagree, absolutely. Especially if it gets the restaurant the visibility to attract those diners. How often do I eat in restaurants that I find in Opentable, that I wouldn't otherwise know about? ALL THE TIME. And for the ability for me to see them and book with them, they only pay a dollar per person - a very LOW per-diner fee, IMHO.

                                      >> How much profit do you think a restaurant clears on each diner?

                                      Much more than a dollar, for most restaurants of the type that are on Opentable.

                                      Advertising and promotions are an expenditure that restaurants make to stay in business and attract customers. That's what Opentable does for the restaurants, just like internet websites, payments to search engines, television and radio ads, Groupons, yellow pages (hard copy and internet), etc.

                                      Obviously, this is a business decision on the part of any restaurant owner. They can use Opentable, they can use their own reservation system on the internet, they can take reservations only by phone, or they can decide not to take reservations at all. Each has its pluses and minuses, in terms of cost, visibility, attractiveness to customers, etc. They can do whatever makes sense to them. And I'll go to restaurants based on what I can find out about them. If there's a particular restaurant I already know about and want to seek out, I might be willing to go through any of those means of obtaining a reservation, or even go to one of the places that don't accept them (which I absolutely HATE doing if I anticipate a long wait). But right now, when I'm not set on a particular restaurant and I want to go out to eat at a given date and time, there's only one place where I can go and, in under a minute, see hundreds of restaurants that have availability, without having to look at restaurants that are full or don't take reservations or are closed at that time. And that's Opentable. There's no other way to find out that information with a few clicks of the keyboard. If and when there's some other alternative - maybe an internet site that aggregates information from Opentable and all competitors and individual restaurant websites - I'd be happy to try it out. But right now it doesn't exist, and there's only one place where a diner can find out information without having to take the time to check one individual restaurant at a time, which is time-consuming and frustrating.

                                      1. re: nsxtasy

                                        Beautifully put. Couldn't agree more.

                                          1. re: nsxtasy

                                            Nailed it (though I think your Alinea example is way off base when you consider the market).

                                            It's a free market, clearly OT provides a service the market finds value in, otherwise they simply would not exist. Once there is an alternative that provides a similar experience, the market will regulate the price...as of right now, OT are enjoying the benefits of being first, don't begrudge them that. If you find what they do egregious, help fund or develop an alternative.

                              2. Although Opentable costs, there is also a cost of not using Opentable, for the labor to handle the functions that are automated on Opentable. I have heard that Alinea, a restaurant in Chicago that does not use Opentable, requires several full-time people to handle calls for reservations. Except around the first of the month, they spend most of the time telling people over the phone that they have no availability and can only put them on a waiting list.

                                6 Replies
                                1. re: nsxtasy

                                  I gather that Alinea's case is the cost of having NO automated reservation system?

                                  Meritage is ditching Open Table, not automation. They have another system that handles on-line reservations via their website.

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                                  Meritage
                                  410 Saint Peter St, Saint Paul, MN 55102

                                  1. re: KTFoley

                                    That's correct. Thanks for the clarification.

                                    1. re: nsxtasy

                                      But Alinea is a different beast. How many restaurants in the country require reservations 6 months in advance on a $250 set menu?

                                      Hell's Kitchen paid OpenTable $32,000 last year. That is enough for 2 - 4 employees of various duties and hours. I'd rather see humans get paid than a software suite that is only making a small handful of executives and investors rich.

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                                      Hell's Kitchen
                                      80 South 9th Street, Minneapolis, MN 55402

                                      1. re: semanticantics

                                        >> How many restaurants in the country require reservations 6 months in advance on a $250 set menu?

                                        I don't know, but Alinea is not one of them. Alinea opens reservations on the first of the month for two months later, so August 1 they will start accepting reservations for October. The menu is currently $210. However, you are correct that Alinea is certainly unique, as it's been praised as the best restaurant in the United States and one of the ten best in the world. Which, along with the food and experience on which the praise is based, is why the demand for reservations there is so high.

                                        1. re: nsxtasy

                                          Just because you call doesn't mean you get a reservation. It could be 6 months to get in, or it could even be never.

                                          Does $210 include drinks and tip?

                                          I've got the cookbook, worth it just for the olive oil pudding recipe.

                                          1. re: semanticantics

                                            You can't get a reservation at Alinea six months in advance because they don't accept them that far in advance. Right now (July 23) they are only accepting reservations through September 30.

                                2. If it is, you can bet Opentable will react and cut their fees. The situation as it sits is that OT has a virtual monopoly and charges whatever they can get away with. So they charge $ per month plus $ PER PERSON for an online reservation, while fledgling competitors such as Eveve.com and Reserveinteractive.com charge $ per month only, or $ per reservation. It's unreasonable that a restaurant would have to pay per person for an online reservation, I'm sure the load on the system is the same whether it's for 1 diner or 10, but hey OT is in it to make money, like any other business, including restaurants, who have to decide for themselves whether the cost is worth it.

                                  If they want to offer online reservations for customer convenience there are lots of other options for a lot less money. If they get enough business from people browsing for available reservations nearby on OT to get enough incremental income to cover the cost then OT is worth keeping, they just have to analyze how many reservations came in through OT vs their own website. Obviously Meritage did the math and decided to ditch it.

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                                  Meritage
                                  410 Saint Peter St, Saint Paul, MN 55102

                                  1. Something interesting to me is restaurants that can fill every seat well in advance without OpenTable, yet still use OT for a small # of seats even though they still have in-house reservation systems duplicating the work.

                                    Seems like these places want to basically be part of the OT network for whatever publicity they get from it (even though the two I have in mind don't need it) and don't mind paying the fees. I know they sure skew the curve when you compare the ratings numbers OT uses.

                                    The two I'm thinking about are French Laundry in Napa and Per Se in NYC, both Thomas Keller restaurants, both Michelin 3*. French Laundry begins accepting reservations each morning for 60 days in advance and has several hundred frantic callers jamming the lines trying for a seat (mostly without success), yet they still toss OT a couple of seatings each day (at the worst times) even though they could fill those themselves in the first few minutes of accepting calls.

                                    Per Se isn't quite as difficult to get in (30 days in advance and they don't fill up near-instantaneously when they open the lines) but is still almost always sold out, yet still holds a few tables for OT.

                                    Of the ten Michelin 3* restaurants in the US the only ones that don't use OT that I'm aware of (having dined at 8 of them the past few months) are Robuchon in Vegas, Alinea and Masa in NYC. I think five of these have a lot of openings and I can sorta see why they use OT (Meadowood, L20, Jean-Georges, Daniel, Le Bernardin), but French Laundry and Per Se are different.

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                                    Masa
                                    1070 Nicollet Mall, Minneapolis, MN 55403

                                    1. Since this post is far more about OpenTable than it is about Meritage or other MSP restaurants, we've zipped it over to the Food Media and News board.